Pine Barren Credits – There’s Money In Those Trees

On July 14, 1993, the Long Island Pine Barrens Protection Act was signed into law by Gov. Mario Cuomo, creating one of the largest comprehensive land management plans in New York history.

After the State Legislature determined to protect approximately 100,000 acres of the Long Island Pine Barrens, the towns of Brookhaven, Riverhead and Southampton had to implement a plan for the preservation of this land thereby protecting drinking water on Long Island’s east end. The overall process called for the protection of the 52,500-acre Core Preservation Area, by forbidding all new development in that area. Since a majority of the area was privately owned, the municipalities were faced with the problem of compensating owners for the value of the land that was no longer capable of development without running afoul of a regulatory taking.

Key to the process of pine barren land preservation is the use of a development technique known as a transfer of development rights (TDR) program. Basically, the TDR program, aptly named the Pine Barren Credit (PBC) Program ensures that economic value is given to the sterilized property in the form of a PBC as recognition that development rights for the property can be transferred by the landowners to a third-party for monetary value or to a “bank” known as the “Pine Barren Clearing House.” The Pine Barren Clearing House was expressly created by state law for the specific purpose of purchasing and selling the TDR’s for use in specific areas of a Town and is overseen by a five-member Clearinghouse Board of Advisors. The registry of PBC’s and their transfers are updated monthly.

The PBC can be used to transfer development rights from the core pine barrens parcels known as a “sending zone” to property in specially designated areas outside the pine barrens core known as “receiving zones.” Thus, areas outside the Pine Barren Core may be developed more intensely.

When might a project require a PBC?: (1) a change in an existing building’s use or an increase in floor area that results in a design sanitary flow rate exceeding Suffolk County Department of Health Services (“SCDHS”) Article 6 limits; (2) a new project that exceeds the allowable sanitary volume specified by SCDHS; (3) a project that increases the number of units or homes above what is allowed by zoning; or (4) a change in land use or zoning.

One of the benefits of the PBC system is that the TDR’s can be purchased by third parties in the open market. Such a broad approach creates a market for the use of development rights and has the potential to significantly increase the density of the permitted zoning. Such an increase in density is a major incentive for owner/developers in the “receiving areas.”

Stay tuned for a more detailed look at how PBC’s are transferred and redeemed.